New Disposal
An Item Disposals Note is an essential tool for maintaining inventory accuracy by recording the removal of stock that is no longer sellable or usable or damaged. This form allows you to account for items lost due to damage, expiration, theft, or obsolescence. To create a new disposal, navigate to Items & Services > Click "Disposal" Tab > Click "+ Add New Disposal" or navigate to Items & Services > Click "New" > Select "Disposal". Processing this form immediately reduces your Quantity On Hand (QOH) and records the financial loss in your accounting records.
Note: The disposal feature is only accessible once a Disposal/Write-Off Account has been configured. You can find this option under Setup > System and GL Setup > Items and Services Defaults.
Location
Select the specific warehouse or store where the items are being removed from. This ensures that the stock is deducted from the correct physical site, keeping your location-specific inventory counts precise.
Reference
The Reference field provides a unique tracking number for the disposal transaction. While the system generates this automatically (e.g., 002/2025), you can manually edit it to correspond with internal waste logs or physical disposal certificates.
Date
Enter the date the physical disposal occurred. This date is vital for financial accuracy, as it determines the specific reporting period in which the inventory asset value is decreased and the loss is recognized.
Barcode
If you use a barcode scanner, you can scan the item's barcode directly into this field. This allows the system to instantly identify and populate the correct item details, reducing manual entry errors.
Branch
Select the business branch associated with this disposal. This allows for localized reporting, helping management identify which branches may have higher rates of stock damage or expiration.
Department
Assign the disposal to a specific internal department (e.g., Quality Control, Warehouse, or Production). This helps in tracking internal accountability and identifying the source of stock discrepancies.
Disposal Items
This section is where you specify the details of the items being removed:
- Item Description: Select the product to be disposed of from the dropdown list. If the item is new to the system, click the + icon to create its profile.
- QOH (Quantity On Hand): This read-only field shows the current digital stock level for the selected item at the chosen location before the disposal is processed.
- Quantity: Enter the number of units being discarded. This quantity will be subtracted from your total inventory.
- Unit: Choose the unit of measurement (e.g., Kgs, Pcs, Ltrs) relevant to the item.
- Unit Cost: This field typically displays the average cost or the latest purchase price of the item. It represents the value lost per unit during disposal.
- Total: The system automatically calculates the total value of the disposal for that line (Quantity × Unit Cost).
- Add Item Button: Click this to add the line item to the disposal list before finalizing the document.
Attachments (Choose File)
You can upload supporting documentation, such as photographs of damaged goods or signed disposal authorization forms. Click Choose File to attach these records, ensuring a transparent audit trail.
Memo
Use this open text area to provide a reason for the disposal (e.g., "Water damage during transit" or "Expired on 20/03/2026"). This context is essential for auditors and management when reviewing inventory losses.
Action Buttons
- Update: Saves any changes to the form data without finalizing the removal of stock from the system.
- Process Disposal: Finalizes the record. This action immediately updates your inventory levels and generates the necessary accounting entries in the General Ledger.
- Draft: Saves the document as a work-in-progress, allowing you to return and finish it later without affecting your stock levels.
General Ledger
The General Ledger (GL) ensures that the financial impact of every disposal is correctly recorded. When a Disposal Note is processed, the system translates the loss of physical stock into financial entries to maintain the integrity of your balance sheet.
The following types of accounts are typically affected in a Disposal:
- Inventory Account: This asset account is Credited, reflecting the reduction in the value of goods held in your warehouse.
- Inventory Disposal/Write-Off Account: This account is Debited to record the value of the disposed items as an expense, directly impacting the Profit and Loss statement.
Custom Fields
Custom fields provide flexibility to track specific data points unique to your disposal process, such as "Reason Code" or "Disposal Method." These can be added via the Add Field button in the line items section or configured for the header/footer of the form.